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The Macro Situation

revision (noun)

• an altered view;

• a revised view of the economy with updated data;

• economic karma.

                                             ― New Entry in the Updated Devil’s Dictionary

Karma can either be good or bad. The Fed must have been good at some point.

The core Personal Consumption Expenditures (PCE) index was favorable.

• Inflation Eases: The PCE index rose by 0.1% in May, indicating a slowdown in inflation since March 2021.

• Annual Gain: Core PCE increased by 2.6% over the previous year, marking the slowest annual gain in over three years.

The Federal Reserve prefers to focus on core PCE, which excludes the volatile food and energy sectors, because it better reflects underlying inflation trends as opposed to the Consumer Price Index (CPI). The CPI measures the price changes on a fixed basket of goods and services, while the PCE measures what consumers are actually spending, reflecting changes in behavior like substituting cheaper products when inflation rises.

Last week’s jobless claims added to the perception that the economy is slowing.

• Though the 233,000 claims were less than the estimated 235,000, the 4-week moving average increased by 3,000 to 236,000.

This trend may seem positive for inflation, but it has also stirred some concern as economists worry that another week or so of high jobless numbers could indicate a significantly softening labor market. This would do more harm to the economy given the Fed’s caution about cutting rates.

According to the Fed Watch tool, which tracks the prices of various futures contracts related to interest rates (particularly the federal funds rate), the chance for a rate cut in September is 57.9%.

Up to the week ending on June 21, 2024, the ANFCI has remained level at -0.53, which is a good sign for the investment climate.

Core Assets Update

Gold (2336.90) prices have lost their momentum due to numerous factors, according to ABN Amro Senior Economist Georgette Boele: uncertainty about future rate cuts, a breakdown of the relationship between gold and real yields, the US dollar outpacing gold, and below-average premiums on gold coins.

Crude Oil (81.46) prices rose towards the end of the week due to the heightened risk of a border confrontation between Israel and Hezbollah. However, signals about weak demand in the US precipitated a decline by the close of markets on Friday.

The 10-year Treasury yield (4.392%) was moving sideways through most of the week but spiked at the close on Friday due to uncertainty about cuts given the Fed's insistence that easing would only occur if inflation were closer to 2%.

                                             -Todd Mei, PhD and Sebastian Purcell, PhD

AI Sentiment Report

The following sentiment scores use AI to track sectors as leading indicators. (Lesson 4 of The Art of The Bubble covers the selection of lead indicators for bubble trades). The scores are most indicative for the next day of trading (a Monday), but they appear to set the general tone for the next week.

-The Research Team:

                     Dom Viera, Samantha Russell, Nicole Zinuhova, Michelle Milan

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Below is a recent comparison of our top trading strategies relative to BTC and ETH since the beginning of the current market cycle.

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DISCLAIMERS

This newsletter is provided for educational and entertainment purposes only. Robin Technologies and Analytics LLC is the firm that distributes The Art of The Bubble products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.

You should expect no financial returns one way or another based on the statements contained herein. These points hold equally for any statements that could be attributed to The Art of The Bubble, 1.2 Labs, or any related business entities or personnel operating in association with Robin Technologies and Analytics LLC. If you decide to buy or invest in anything, then your returns and potential losses are your own. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. No statements about laws are legal advice and you are encouraged to consult your own professional legal counsel. You are finally also encouraged to do your own due diligence before investing in anything consulting with appropriate professionals as needed.

Benchmarks and Data Sources

All data not otherwise specified (or obvious from context) is taken from TradingView.com.

The cryptocurrency benchmark used is an equally weighted mix of BTC and ETH. While the benchmark for stocks used is the Nasdaq 100.

Conflicts of Interest

All contributors to this newsletter should be considered active investors. Because the strategies pursued are often quick, contributors may or may not own the stocks or coins discussed by the time of reading. However, readers should assume that any coins, stocks, or other items discussed are owned by the contributors for conflict of interest purposes.

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